Collateral First: Why a High-Value Skid Steer Overrides Limited Credit History

Collateral First: Why a High-Value Skid Steer Overrides Limited Credit History

For new businesses or those with a Limited Credit History, securing funding for essential assets like a Skid Steer can feel like an impossible hurdle. Traditional lenders often prioritize the applicant's credit score, resulting in a "Bad Fit" exclusion.

The Collateral-Driven Underwriting Advantage

The value of the Skid Steer itself significantly mitigates the lender's risk.

• High Liquidity Asset: A Skid Steer is a universal piece of equipment with high demand. If a loan defaults, the lender can quickly liquidate the asset, reducing the dependence on the borrower’s credit score for security.
• The Down Payment Impact: Offering a higher down payment (e.g., 20% instead of 10%) on a Skid Steer further reduces the lender’s exposure. This commitment can often offset concerns about Limited Credit History.

NLCG's Underwriting Shift

NLCG Underwriting Guidelines are structured to evaluate the asset's earning potential and resale value alongside the borrower's payment capacity.

• Asset Appraisal: We prioritize the equipment's appraised market value, age, and condition. If the equipment is proven to hold its value (like a Skid Steer), the financing structure becomes stronger, opening doors for borrowers with lower FICO scores.
• Focus on Cash Flow: Instead of focusing on past credit mishaps, NLCG Financial Specialists prioritize the current and projected cash flow derived from the equipment's use. Timely, consistent deposits demonstrate a capacity to service the debt.

The SBA's guidance on financing basics emphasizes that collateral is a necessary part of the lending decision. NLCG simply gives the collateral of strong, high-demand equipment a higher weighting than many conventional institutions.

Ready to Put Your Asset to Work?

If you have a high-value asset, APPLY HERE for collateral-focused Rent-to-Own financing today.

Want to know where your credit stands?

If you have a Limited Credit History, speak to a specialist about the power of using high-value assets as collateral. CALL NOW: 1 (858) 345-6338 to discuss your options.